Japan will provide Jordan with several billion yen in official development assistance to help the country alleviate its external debt-repayment burden and enhance domestic political stability amid a critical period for the regional peace process, government sources said Tuesday.

The "nonproject grant-in-aid" money will be extended to Amman before new Jordanian King Abdullah's expected official visit to Tokyo at the end of this year, the sources said. Abdullah ascended to the throne on Feb. 7, immediately after the death of King Hussein, his father, due to cancer.

The Japanese decision comes amid growing expectations of a significant breakthrough in the long-stalled Middle East peace process in the wake of moderate Labor Party leader Ehud Barak's victory over the Likud Party's hardline incumbent Benjamin Netanyahu in a prime ministerial election on May 17.

It also comes several weeks after U.S. President Bill Clinton asked Prime Minister Keizo Obuchi at a meeting in Cologne, Germany, for Japanese cooperation to ease Jordan's foreign debt-repayment burden.

Japan has been the world's largest single aid donor for the past eight consecutive years. Grant-in-aid is one type of Japanese official development assistance, which also covers low-interest official yen loans and technical cooperation.

Unlike "general project grant-in-aid" money, which finances specific projects in a wide range of areas, nonproject grant-in-aid money is provided to help developing countries saddled with ballooning foreign debts and balance-of-payment deficits to promote economic structural reforms under the guidance of the International Monetary Fund and the World Bank.

Japan is a major donor country for Jordan, disbursing a total of 220 billion yen in yen loans alone to the Middle East country as of the end of fiscal 1997, the latest year for which figures are available.

In his meeting with Obuchi in Cologne on June 18, Clinton asked for Japanese cooperation to alleviate Jordan's $7 billion external debt burden and help heal its economic woes as a means of ensuring its political stability.

Obuchi replied that, although it is difficult for Japan to forgive a bilateral debt owed by Jordan, Tokyo would consider some measures to "effectively" help ease the Middle East country's debt-repayment burden.

Obuchi and Clinton were meeting on the fringes of an annual summit of the Group of Eight major countries.

For geopolitical reasons, Jordan's political stability is widely seen as essential to promoting the entire Middle East peace process. Jordan shares its border with Israel, Syria, Iraq and the Palestinian Autonomous Areas.

Jordan signed a peace pact with Israel in 1994, becoming the second Arab country to do so after Egypt.

The G8 leaders in Cologne also issued a special statement on regional issues, in which they welcomed Abdullah's "reaffirmation of Jordan's long-standing support for the Middle East peace process" and said they are "committed to enhancing (its) stability by supporting Jordan's economic reform during this critical period."

"We recognize the importance that Jordan attaches to alleviating its debt burden and call on the international community to provide economic assistance, including, where appropriate, debt relief," the statement continues.

Although the G8 agreed at the summit to forgive all ODA debts owed by heavily indebted poor countries, Jordan will not benefit from the agreement. Jordan is not classified by the World Bank as an HIPC because of the relatively high level of its per capita income.

Before the summit, Clinton pledged to Abdullah to cancel about $700 million in a bilateral debt owed by Jordan to the U.S.

But Japan has been reluctant to follow suit because that step would make it extremely difficult to extend fresh yen loans to Jordan. Japan's basic aid policy calls for a suspension of fresh yen loans to a developing country that cancels, even partially, its bilateral debt to Japan.